Selectquote, inc. reports third quarter of fiscal year 2022 results
Overland park, kan.--(business wire)--selectquote, inc. (nyse: slqt) reported consolidated revenue for the third quarter of fiscal year 2022 of $275.1 million compared to consolidated revenue for the third quarter of fiscal year 2021 of $265.3 million. consolidated net loss for the third quarter of fiscal year 2022 was $6.4 million compared to consolidated net income for the third quarter of fiscal year 2021 of $35.2 million. finally, consolidated adjusted ebitda* for the third quarter of fiscal year 2022 was $13.0 million, compared to consolidated adjusted ebitda* for the third quarter of fiscal year 2021 of $63.6 million. chief executive officer tim danker commented, “we were pleased with our third quarter results, which finished ahead of our internal expectations. during the quarter, we saw improved sales conversion rates and lower marketing cost per sale, which while early, gives us even more confidence about the steps we are taking to improve our operating and financial results. as we execute on our planned pullback in medicare policy sales in the near term, we are focused now more than ever on delivering high-value business to our carrier partners and to improving the cash efficiency of our business. we are also thrilled with the continued momentum of the population health business, particularly our selectrx pharmacy business, which ended april with over 23,000 members, a nearly 10-fold increase in less than a year.” raff sadun, chief financial officer, also commented, “as discussed on our second quarter call, a key aspect of our long-term strategy is to reduce the overall operating leverage of our business to deliver attractive returns in a wide range of potential market scenarios. we made major progress on that front during the quarter, identifying over $200 million in expense reduction opportunities, excluding our planned investments in the growth of our cash-efficient selectrx business. approximately 20% of those identified savings are fixed cost actions we already executed during the 3rd quarter. while we are not updating our 2022 guidance, so far we see similar trends in the fourth quarter and are more focused on full year 2023.” *see reconciliation from gaap to non-gaap measures starting on page 11. segment results we currently report on three segments: 1) senior, 2) life and 3) auto & home. the performance measures of the segments include total revenue and adjusted ebitda.* costs of revenue, marketing and advertising, and technical development operating costs and expenses that are directly attributable to a segment are reported within the applicable segment. indirect costs of revenue, marketing and advertising, and technical development operating costs and expenses are allocated to each segment based on varying metrics such as headcount. adjusted ebitda* is calculated as total revenue for the applicable segment less: direct and allocated costs of revenue, marketing and advertising, technical development, and general and administrative operating costs and expenses, excluding depreciation and amortization expense; gain or loss on disposal of property, equipment, and software; share-based compensation expense; restructuring expenses; and non-recurring expenses such as severance payments and transaction costs. senior financial results the following table provides the financial results for the senior segment for the periods presented: three months ended march 31, nine months ended march 31, (in thousands) 2022 2021 % change 2022 2021 % change revenue $ 233,172 $ 215,600 8 % $ 497,459 $ 604,309 (18 )% adjusted ebitda* 32,182 75,489 (57 )% (149,424 ) 218,946 (168 )% adjusted ebitda margin* 14 % 35 % (30 )% 36 % operating metrics submitted policies submitted policies are counted when an individual completes an application with our licensed agent and provides authorization to the agent to submit the application to the insurance carrier partner. the applicant may have additional actions to take, such as providing additional information, before the application will be reviewed by the insurance carrier. the following table shows the number of submitted policies for the periods presented: three months ended march 31, nine months ended march 31, 2022 2021 % change 2022 2021 % change medicare advantage 242,721 160,233 51 % 678,827 454,772 49 % medicare supplement 1,389 3,738 (63 )% 6,318 24,287 (74 )% dental, vision and hearing 40,178 38,757 4 % 122,214 101,819 20 % prescription drug plan 1,079 1,568 (31 )% 6,193 10,243 (40 )% other 4,907 6,781 (28 )% 11,436 12,603 (9 )% total 290,274 211,077 38 % 824,988 603,724 37 % *see reconciliation from gaap to non-gaap measures starting on page 11. approved policies approved policies represents the number of submitted policies that were approved by our insurance carrier partners for the identified product during the indicated period. not all approved policies will go in force. the following table shows the number of approved policies for the periods presented: three months ended march 31, nine months ended march 31, 2022 2021 % change 2022 2021 % change medicare advantage 196,377 132,950 48 % 546,031 384,137 42 % medicare supplement 1,159 3,073 (62 )% 4,654 19,849 (77 )% dental, vision and hearing 34,486 34,517 — % 101,251 84,370 20 % prescription drug plan 1,095 2,109 (48 )% 5,315 9,556 (44 )% other 3,836 5,129 (25 )% 9,199 10,209 (10 )% total 236,953 177,778 33 % 666,450 508,121 31 % lifetime value of commissions per approved policy lifetime value of commissions per approved policy represents commissions estimated to be collected over the estimated life of an approved policy based on multiple factors, including but not limited to, contracted commission rates, carrier mix and expected policy persistency with applied constraints. the lifetime value of commissions per approved policy is equal to the sum of the commission revenue due upon the initial sale of a policy, and when applicable, an estimate of future renewal commissions. the following table shows the lifetime value of commissions per approved policy for the periods presented: three months ended march 31, nine months ended march 31, (dollars per policy): 2022 2021 % change 2022 2021 % change medicare advantage $ 933 $ 1,362 (31 )% $ 935 $ 1,290 (28 )% medicare supplement 949 1,345 (29 )% 1,275 1,263 1 % dental, vision and hearing 120 129 (7 )% 123 140 (12 )% prescription drug plan 229 213 8 % 235 230 2 % other 95 60 58 % 77 95 (19 )% per unit economics per unit economics represents total medicare advantage and medicare supplement commissions, other product commissions, other revenues, and costs associated with the senior segment, each shown per number of approved medicare advantage and medicare supplement policies over a given time period. management assesses the business on a per-unit basis to help ensure the revenue opportunity associated with a successful policy sale is attractive relative to the marketing acquisition cost. because not all acquired leads result in a successful policy sale, all per-policy metrics are based on approved policies, which is the measure that triggers revenue recognition. the medicare advantage and medicare supplement commission per ma/ms policy represents the lifetime value of commissions for policies sold in the period. other commission per ma/ms policy represents the lifetime value of commissions for other products sold in the period, including dental, vision and hearing, prescription drug plan, and other products, which management views as additional commission revenue on our agents’ core function of ma/ms policy sales. other per ma/ms policy represents the production bonuses, lead sales revenue from insideresponse, and updated estimates of prior period variable consideration based on actual policy renewals in the current period. total operating expenses per ma/ms policy represents all of the operating expenses within the senior segment. the revenue to customer acquisition cost (“cac”) multiple represents total revenue per ma/ms policy as a multiple of total marketing acquisition cost, which represents the direct costs of acquiring leads. these costs are included in marketing and advertising expense within the total operating expenses per ma/ms policy. the following table shows per unit economics for the periods presented. based on the seasonality of the senior segment and the fluctuations between quarters, we believe that the most relevant view of per unit economics is on a rolling 12-month basis. all per-ma/ms policy metrics below are based on the sum of approved ma/ms policies, as both products have similar commission profiles. these metrics are the basis on which management assesses the business: twelve months ended march 30, (dollars per approved policy): 2022 2021 % change medicare advantage and medicare supplement approved policies 636,195 464,653 37 % medicare advantage and medicare supplement commission per ma/ms policy $ 963 $ 1,286 (25 )% other commission per ma/ms policy 29 38 (24 )% other per ma/ms policy (14 ) 166 (108 )% total revenue per ma/ms policy 978 1,490 (34 )% total operating expenses per ma/ms policy (1,173 ) (947 ) 24 % adjusted ebitda per ma/ms policy* $ (195 ) $ 543 (136 )% adjusted ebitda margin per ma/ms policy* (20 )% 36 % (155 )% revenue/cac multiple 1.8 x 3.1 x life financial results the following table provides the financial results for the life segment for the periods presented: three months ended march 31, nine months ended march 31, (in thousands) 2022 2021 % change 2022 2021 % change revenue $ 39,400 $ 44,823 (12 )% $ 119,612 $ 121,917 (2 )% adjusted ebitda* (1,888 ) 1,598 (218 )% 2,265 16,385 (86 )% adjusted ebitda margin* (5 )% 4 % 2 % 13 % operating metrics life premium represents the total premium value for all policies that were approved by the relevant insurance carrier partner and for which the policy document was sent to the policyholder and payment information was received by the relevant insurance carrier partner during the indicated period. because our commissions are earned based on a percentage of total premium, total premium volume for a given period is the key driver of revenue for our life segment. *see reconciliation from gaap to non-gaap measures starting on page 11. the following table shows term and final expense premiums for the periods presented: three months ended march 31, nine months ended march 31, (in thousands) 2022 2021 % change 2022 2021 % change term premiums $ 14,933 $ 19,043 (22 )% $ 45,990 $ 56,784 (19 )% final expense premiums 28,532 24,817 15 % 83,718 56,269 49 % total $ 43,465 $ 43,860 (1 )% 129,708 113,053 15 % auto & home financial results the following table provides the financial results for the auto & home segment for the periods presented: three months ended march 31, nine months ended march 31, (in thousands) 2022 2021 % change 2022 2021 % change revenue $ 7,152 $ 6,973 3 % $ 20,755 $ 23,752 (13 )% adjusted ebitda* 1,150 1,096 5 % 3,957 6,863 (42 )% adjusted ebitda margin* 16 % 16 % 19 % 29 % operating metrics auto & home premium represents the total premium value of all new policies that were approved by our insurance carrier partners during the indicated period. because our commissions are earned based on a percentage of total premium, total premium volume for a given period is the key driver of revenue for our auto & home segment. the following table shows premiums for the periods presented: three months ended march 31, nine months ended march 31, (in thousands): 2022 2021 % change 2022 2021 % change premiums $ 12,516 $ 12,010 4 % $ 36,358 $ 42,165 (14 )% *see reconciliation from gaap to non-gaap measures starting on page 11. earnings conference call selectquote, inc. will host a conference call with the investment community today, thursday, may 5, 2022, beginning at 8:30 a.m. et. to register for this conference call, please use this link: http://www.directeventreg.com/registration/event/1378747. after registering, a confirmation will be sent via email, including dial-in details and unique conference call codes for entry. registration is open through the live call, but to ensure you are connected for the full call we suggest registering a day in advance or at minimum 10 minutes before the start of the call. the event will also be webcasted live via our investor relations website https://ir.selectquote.com/investor-home/default.aspx. non-gaap financial measures this release includes certain non-gaap financial measures intended to supplement, not substitute for, comparable gaap measures. to supplement our financial statements presented in accordance with gaap and to provide investors with additional information regarding our gaap financial results, we have presented in this release adjusted ebitda and adjusted ebitda margin, which are non-gaap financial measures. these non-gaap financial measures are not based on any standardized methodology prescribed by gaap and are not necessarily comparable to similarly titled measures presented by other companies. we define adjusted ebitda as income (loss) before interest expense, income tax expense (benefit), depreciation and amortization, and certain add-backs for non-cash or non-recurring expenses, including restructuring and share-based compensation expenses. the most directly comparable gaap measure is net income (loss). we monitor and have presented in this release adjusted ebitda because it is a key measure used by our management and board of directors to understand and evaluate our operating performance, to establish budgets and to develop operational goals for managing our business. in particular, we believe that excluding the impact of these expenses in calculating adjusted ebitda can provide a useful measure for period-to-period comparisons of our core operating performance. we believe that this non-gaap financial measure helps identify underlying trends in our business that could otherwise be masked by the effect of the expenses that we exclude in the calculations of this non-gaap financial measure. accordingly, we believe that this financial measure provides useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects. forward looking statement this release contains forward-looking statements. these forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. these statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would” and “outlook,” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. these forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. there are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to, the following: the ultimate duration and impact of the ongoing covid-19 pandemic, our reliance on a limited number of insurance carrier partners and any potential termination of those relationships or failure to develop new relationships; existing and future laws and regulations affecting the health insurance market; changes in health insurance products offered by our insurance carrier partners and the health insurance market generally; insurance carriers offering products and services directly to consumers; changes to commissions paid by insurance carriers and underwriting practices; competition with brokers, exclusively online brokers and carriers who opt to sell policies directly to consumers; competition from government-run health insurance exchanges; developments in the u.s. health insurance system; our dependence on revenue from carriers in our senior segment and downturns in the senior health as well as life, automotive and home insurance industries; our ability to develop new offerings and penetrate new vertical markets; risks from third-party products; failure to enroll individuals during the medicare annual enrollment period; our ability to attract, integrate and retain qualified personnel; our dependence on lead providers and ability to compete for leads; failure to obtain and/or convert sales leads to actual sales of insurance policies; access to data from consumers and insurance carriers; accuracy of information provided from and to consumers during the insurance shopping process; cost-effective advertisement through internet search engines; ability to contact consumers and market products by telephone; global economic conditions; disruption to operations as a result of future acquisitions; significant estimates and assumptions in the preparation of our financial statements; impairment of goodwill; potential litigation and claims, including ip litigation; our existing and future indebtedness; our ability to maintain compliance with or renegotiate or obtain waivers of our debt covenants; developments with respect to libor; access to additional capital; failure to protect our intellectual property and our brand; fluctuations in our financial results caused by seasonality; accuracy and timeliness of commissions reports from insurance carriers; timing of insurance carriers’ approval and payment practices; factors that impact our estimate of the constrained lifetime value of commissions per policyholder; changes in accounting rules, tax legislation and other legislation; disruptions or failures of our technological infrastructure and platform; failure to maintain relationships with third-party service providers; cybersecurity breaches or other attacks involving our systems or those of our insurance carrier partners or third-party service providers; our ability to protect consumer information and other data; and failure to market and sell medicare plans effectively or in compliance with laws. for a further discussion of these and other risk factors that could impact our future results and performance, see the section entitled “risk factors” in the most recent annual report on form 10-k (the “annual report”) filed by us with the securities and exchange commission. accordingly, you should not place undue reliance on any such forward-looking statements. any forward-looking statement speaks only as of the date on which it is made, and, except as otherwise required by law, we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. about selectquote: founded in 1985, selectquote (nyse: slqt) provides solutions that help consumers protect their most valuable assets: their families, health and property. selectquote pioneered the model of providing unbiased comparisons from multiple, highly-rated insurance companies allowing consumers to choose the policy and terms that best meet their unique needs. two foundational pillars underpin the company’s success: a strong force of highly-trained and skilled agents who provide a consultative needs analysis for every consumer, and proprietary technology that sources and routes high-quality leads. selectquote has three core business lines: selectquote senior, selectquote life and selectquote auto and home. selectquote senior, the largest and fastest-growing business, serves the needs of a demographic that sees 10,000 people turn 65 each day with a range of medicare advantage and medicare supplement plans. in 2021, selectquote expanded its business with the addition of population health, a healthcare services company, and selectrx, a specialty medication management pharmacy. selectquote, inc. and subsidiaries condensed consolidated balance sheets (unaudited) (in thousands) march 31, 2022 june 30, 2021 assets current assets: cash and cash equivalents $ 199,359 $ 286,454 accounts receivable 168,735 105,298 commissions receivable-current 77,158 89,120 other current assets 13,246 4,486 total current assets 458,498 485,358 commissions receivable 761,138 756,777 property and equipment—net 45,558 29,510 software—net 15,558 12,611 operating lease right-of-use assets 29,018 31,414 intangible assets—net 36,022 40,670 goodwill 73,732 68,019 other assets 15,790 1,436 total assets $ 1,435,314 $ 1,425,795 liabilities and shareholders’ equity current liabilities: accounts payable $ 27,445 $ 34,079 accrued expenses 35,593 20,676 accrued compensation and benefits 46,229 40,909 operating lease liabilities—current 5,181 5,289 current portion of long-term debt 7,169 2,360 other current liabilities 2,079 5,504 total current liabilities 123,696 108,817 long-term debt, net—less current portion 699,386 459,043 deferred income taxes 76,806 139,240 operating lease liabilities 35,301 38,392 other liabilities 3,533 11,743 total liabilities 938,722 757,235 commitments and contingencies shareholders’ equity: common stock, $0.01 par value 1,644 1,635 additional paid-in capital 554,045 544,771 retained earnings (accumulated deficit) (68,684 ) 121,925 accumulated other comprehensive income 9,587 229 total shareholders’ equity 496,592 668,560 total liabilities and shareholders’ equity $ 1,435,314 $ 1,425,795 selectquote, inc. and subsidiaries condensed consolidated statements of comprehensive income (loss) (unaudited) (in thousands) three months ended march 31, nine months ended march 31, 2022 2021 2022 2021 revenue: commission $ 222,538 $ 235,216 $ 495,494 $ 660,631 production bonus and other 52,575 30,130 132,127 85,054 total revenue 275,113 265,346 627,621 745,685 operating costs and expenses: cost of revenue 119,459 71,439 359,732 206,605 marketing and advertising 125,082 116,690 409,005 298,696 general and administrative 21,031 19,251 64,570 44,496 technical development 6,436 4,860 18,675 13,458 total operating costs and expenses 272,008 212,240 851,982 563,255 income (loss) from operations 3,105 53,106 (224,361 ) 182,430 interest expense, net (12,179 ) (7,355 ) (31,300 ) (20,898 ) loss on extinguishment of debt — (3,315 ) — (3,315 ) other expense, net (23 ) (349 ) (177 ) (1,545 ) income (loss) before income tax expense (benefit) (9,097 ) 42,087 (255,838 ) 156,672 income tax expense (benefit) (2,649 ) 6,852 (65,229 ) 31,846 net income (loss) $ (6,448 ) $ 35,235 $ (190,609 ) $ 124,826 net income (loss) per share: basic $ (0.04 ) $ 0.21 $ (1.16 ) $ 0.77 diluted $ (0.04 ) $ 0.21 $ (1.16 ) $ 0.75 weighted-average common stock outstanding used in per share amounts: basic 164,083 163,023 163,914 162,705 diluted 164,083 165,731 163,914 165,495 other comprehensive income, net of tax: gain on cash flow hedge 7,589 1,810 9,358 1,669 other comprehensive income 7,589 1,810 9,358 1,669 comprehensive income (loss) $ 1,141 $ 37,045 $ (181,251 ) $ 126,495 selectquote, inc. and subsidiaries condensed consolidated statements of cash flows (unaudited) (in thousands) nine months ended march 31, 2022 2021 cash flows from operating activities: net income (loss) $ (190,609 ) $ 124,826 adjustments to reconcile net income (loss) to net cash and cash equivalents used in operating activities: depreciation and amortization 17,957 11,260 loss on disposal of property, equipment, and software 741 261 share-based compensation expense 6,252 3,689 deferred income taxes (65,623 ) 31,702 amortization of debt issuance costs and debt discount 4,217 2,482 write-off of debt issuance costs — 2,570 fair value adjustments to contingent earnout obligations — 1,487 non-cash lease expense 3,065 2,869 changes in operating assets and liabilities: accounts receivable (62,803 ) (49,224 ) commissions receivable 7,601 (251,188 ) other assets (8,275 ) 4,349 accounts payable and accrued expenses 8,096 26,223 operating lease liabilities (3,868 ) (2,631 ) other liabilities (1,113 ) 30,378 net cash used in operating activities (284,362 ) (60,947 ) cash flows from investing activities: purchases of property and equipment (24,515 ) (6,520 ) purchases of software and capitalized software development costs (7,570 ) (5,807 ) acquisition of business (6,927 ) (23,879 ) investment in equity securities (1,000 ) — net cash used in investing activities (40,012 ) (36,206 ) cash flows from financing activities: proceeds from revolving credit facility 50,000 — payments on revolving credit facility (50,000 ) — proceeds from ddtl facility 242,000 — payments on ddtl facility (613 ) — net proceeds from term loans — 228,753 payments on term loans (1,180 ) (84,118 ) payments on other debt (130 ) (189 ) proceeds from common stock options exercised and employee stock purchase plan 3,179 1,778 payments of tax withholdings related to net share settlement of equity awards (148 ) (10,026 ) payments of debt issuance costs (328 ) (885 ) payments of costs incurred in connection with private placement — (1,771 ) payments of costs incurred in connection with initial public offering — (3,911 ) payment of contingent earnout liability — (32,300 ) payment of acquisition holdback (5,501 ) — net cash provided by financing activities 237,279 97,331 net increase (decrease) in cash and cash equivalents (87,095 ) 178 cash and cash equivalents—beginning of period 286,454 368,870 cash and cash equivalents—end of period $ 199,359 $ 369,048 selectquote, inc. and subsidiaries adjusted ebitda to net income (loss) reconciliation (unaudited) three months ended march 31, 2022 (in thousands) senior life auto & home corp & elims consolidated revenue $ 233,172 $ 39,400 $ 7,152 $ (4,611 ) $ 275,113 operating expenses (200,990 ) (41,288 ) (6,002 ) (13,819 ) (262,099 ) other expenses, net — — — (23 ) (23 ) adjusted ebitda 32,182 (1,888 ) 1,150 (18,453 ) 12,991 share-based compensation expense (2,143 ) non-recurring expenses (703 ) depreciation and amortization (6,679 ) loss on disposal of property, equipment, and software, net (384 ) interest expense, net (12,179 ) income tax benefit 2,649 net loss $ (6,448 ) three months ended march 31, 2021 (in thousands) senior life auto & home corp & elims consolidated revenue $ 215,600 $ 44,823 $ 6,973 $ (2,050 ) $ 265,346 operating expenses (140,111 ) (43,225 ) (5,877 ) (12,507 ) (201,720 ) other expenses, net — — — (15 ) (15 ) adjusted ebitda 75,489 1,598 1,096 (14,572 ) 63,611 share-based compensation expense (1,429 ) non-recurring expenses (4,667 ) fair value adjustments to contingent earnout obligations (334 ) depreciation and amortization (4,323 ) loss on disposal of property, equipment, and software (101 ) interest expense, net (7,355 ) loss on extinguishment of debt (3,315 ) income tax expense (6,852 ) net income $ 35,235 selectquote, inc. and subsidiaries adjusted ebitda to net income (loss) reconciliation (unaudited) nine months ended march 31, 2022 (in thousands) senior life auto & home corp & elims consolidated revenue $ 497,459 $ 119,612 $ 20,755 $ (10,205 ) $ 627,621 operating expenses (646,883 ) (117,347 ) (16,798 ) (43,149 ) (824,177 ) other expenses, net — — — (177 ) (177 ) adjusted ebitda (149,424 ) 2,265 3,957 (53,531 ) (196,733 ) share-based compensation expense (6,252 ) non-recurring expenses (2,857 ) depreciation and amortization (17,957 ) loss on disposal of property, equipment, and software, net (739 ) interest expense, net (31,300 ) income tax benefit 65,229 net loss $ (190,609 ) nine months ended march 31, 2021 (in thousands) senior life auto & home corp & elims consolidated revenue $ 604,309 $ 121,917 $ 23,752 $ (4,293 ) $ 745,685 operating expenses (385,363 ) (105,532 ) (16,889 ) (34,771 ) (542,555 ) other expenses, net — — — (58 ) (58 ) adjusted ebitda 218,946 16,385 6,863 (39,122 ) 203,072 share-based compensation expense (3,689 ) non-recurring expenses (5,490 ) fair value adjustments to contingent earnout obligations (1,487 ) depreciation and amortization (11,260 ) loss on disposal of property, equipment, and software (261 ) interest expense, net (20,898 ) loss on extinguishment of debt (3,315 ) income tax expense (31,846 ) net income $ 124,826 selectquote, inc. and subsidiaries net loss to adjusted ebitda reconciliation (unaudited) guidance net loss to adjusted ebitda reconciliation, year ending june 30, 2022: (in thousands) range net loss $ (255,000 ) $ (236,000 ) income tax benefit (86,000 ) (80,000 ) interest expense, net 43,000 43,000 depreciation and amortization 22,000 22,000 share-based compensation expense 11,000 11,000 non-recurring expenses 5,000 5,000 adjusted ebitda $ (260,000 ) $ (235,000 )
